If you are considering refinancing your California mortgage loan and would rather deal with a wholesale mortgage lender instead of your bank, you will need to enlist the help of a mortgage broker. Before choosing a mortgage broker you should negotiate with potential brokers and find one that agrees not to charge you Yield Spread Premium. Here are several tips to help you secure wholesale mortgage rates when refinancing your California mortgage.
Yield Spread Premium is the retail markup of your mortgage interest rate for a commission. When you refinance with a mortgage broker the wholesale lender behind your loan qualifies you for a specific wholesale mortgage interest rate. Your broker marks your mortgage rate up because the wholesale lender pays them a bonus for every quarter percent you agree to overpay above the rate you qualified. This problem of Yield Spread Premium is magnified by the high cost of real estate in California.
Homeowners typically do not have access to wholesale lenders in California; however, once you find a mortgage broker that agrees not to charge you Yield Spread Premium you will have access to wholesale mortgage rates. Tell your potential mortgage brokers that you understand Yield Spread Premium and will not accept a mortgage that includes this markup. Let them know you will pay a reasonable fee for the origination and all necessary closing costs; however, you will not tolerate retail markup of your mortgage rate. If possible try and deal with the owner of firm you are dealing with when negotiating and make sure the mortgage broker is licensed in the State of California. You can learn more about refinancing with a wholesale lender in California, including costly pitfalls to avoid with our free mortgage tutorial.
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Brokers hitting consumers with Yield Spread Premium is one of the nastiest parts of the mortgage business. Employing an Upfront Mortgage Broker who is bound to his association to state upfront exactly how he or she is to be paid helps avoid this problem.
I’m looking for a wholesale mortgage broker in Oregon – any listing of such companies?